In recent years, India** has been putting pressure on Chinese companies, especially in the smartphone industry, and has frequently introduced various restrictions and requirements in an attempt to coerce Chinese companies to seize market share and profits. Recently, India** has dealt a heavy blow to vivo and arrested a number of executives of vivo India on the grounds of "anti-money laundering investigation". This is another blow to Chinese mobile phone manufacturers by India after Xiaomi's huge funds were frozen.
In recent years, India's restrictions on Chinese manufacturers have been cracked down, first of all, Xiaomi was frozen a huge amount, and then India required all Chinese mobile phone manufacturers to be Indian nationals.
On June 9, 2023, Xiaomi, a Chinese mobile phone manufacturer that is actively deploying in the Indian market, was formally charged by Indian law enforcement with "illegally transferring funds to foreign entities", violating India's foreign exchange management law, and was frozen 4.8 billion yuan, which is equivalent to 57% of Xiaomi's net profit last year. Xiaomi explained that more than 84% of the money was a royalty paid to Qualcomm in the United States, but India refused to unfreeze it.
With a whopping 28% market share in India, Xiaomi is India's largest smartphone brand and the country's largest exporter of mobile phones. Xiaomi's investment in India is also huge, having built three mobile phone manufacturing plants, employing more than 20,000 Indian employees and more than 5,000 offline stores.
After Xiaomi's huge sums of money were frozen, India put forward new requirements for Chinese companies. India's "Economic Times" quoted sources as revealing that India's ** department will require all Chinese mobile phone manufacturers such as Xiaomi, OPPO, and vivo to hold key positions such as CEOs, chief operating officers, chief financial officers, and chief technology officers, which are held by Indians. At the same time, it is required to outsource OEM production to Indian companies and expand exports from local distributors. India's move completely ignores international law and basic commercial principles, and is tantamount to a total takeover of China's mobile phone companies in India, which is actually a naked robbery.
Why is India so barbaric to foreign businessmen?
India's suppression and plundering of Chinese mobile phone manufacturers is a typical manifestation of India's economic nationalism. The essence of Indian economic nationalism is that of the spokesmen of the Indian Brahmins and Banyas, who very much want to have a place in the world economy, or to have a dominant position, but their own industries are very backward. Although they hope to use foreign capital and technology to promote the development of their own industries, they are full of jealousy and hatred for foreign capital to occupy the Indian domestic market, and they believe that the Indian market can only be theirs. Therefore, when the industries supported by foreign capital have developed to a certain extent, and when the markets that did not exist before are opened, these Banya will be eager to take it for themselves. But fair competition they can't compete with foreign capital, so they will use administrative means to forcibly seize it.
India's plundering of China's mobile phone industry is a case in point. Before China's smartphone brands such as Xiaomi, OPPO, and vivo entered India, India's smartphone manufacturing industry was at a low level and the market size was small. After the entry of Chinese smartphone brands, with superior performance and low **, the development of India's smartphone manufacturing industry and the rapid expansion of market size have been promoted. Now, India has become the world's second-largest producer of smartphones and exports a large number to the rest of the world. Under such circumstances, India began to demand the localized production of Chinese smartphone brands step by step through administrative means such as raising tariffs, from local assembly, to parts production, to core component production, and now requires Indians to serve as executives, which is actually a gradual means of forcibly seizing Chinese companies.
India's economic nationalism is not only aimed at Chinese companies, but also affects other foreign companies, and India is known as the "graveyard of foreign companies".。In addition to Chinese companies, multinational giants including Vodafone, Walmart, Nokia, Samsung, IBM, Amazon, Google, Microsoft and other multinational giants have suffered setbacks in the Indian market and have been fined heavily. Walmart was fined 13 in 2021 by India for violating foreign investment laws$500 million, Walmart directly withdrew from the Indian market. According to India**, a total of 2,783 multinationals closed their subsidiaries or offices in India between 2014 and 2021.
India's economic nationalism harms not only foreign businesses, but also India's own interests. India's repression and plundering will lead to a decline in foreign companies' confidence in the Indian market, reducing or withdrawing investment in India, thus affecting India's economic growth and job creation. At the same time, India's actions will also cause countermeasures and retaliation from foreign countries, resulting in a decline in India's reputation and status in the international community.
Two Vivo executives were arrested in India